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Mitsubishi plans raising stake in Anglo¡¯s Quellaveco copper project-2018 China(Guangzhou)Int¡¯l Non-Ferrous Metal£¨Copper£©Exhibition
1/23/2018 Copper exhibition -non-ferrous metals expo |
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FT reported that Mitsubishi has appointed advisers as the Japanese conglomerate considers adding to its stake in Anglo American¡¯s Quellaveco copper project in southern Peru.
Quellaveco is one of the world¡¯s largest untapped copper orebodies and Anglo¡¯s board will decide later this year whether to give the green light to USD 5.5bn development plan.
However, the miner won¡¯t take a final investment decision until it has de-risked the project by reducing its 82 % stake.
Anglo chief executive Mark Cutifani told investors last year that he wanted to keep at least a 51 % stake in Quellaveco and had been ¡°engaging¡± with potential partners.
As an existing partner, Mitsubishi has an option to increase its holding in Quellaveco from 18 % to 30 % and is said to be working with Barclays to assess its options, according to people familiar with the matter.
¡°At this stage nothing has been decided,¡± spokesman for Mitsubishi told the Financial Times. However, analysts would not be surprised if the company decided to raise its stake given the favourable outlook for copper.
The metal, which is extensively used in wiring and power networks, has risen 22 per cent over the past year and is currently trading above USD 7,000 a tonne.
Large deficits are expected to open up over the next five years in copper as demand outstrips supply and the metal is also expected to benefit from a buildout of charging networks required for electric cars.
There are only a couple of big copper projects currently under development. One is First Quantum¡¯s Cobre Panama, which is expected to come on stream later this year. Another is Rio Tinto¡¯s Oyu Tolgoi underground project. But that won¡¯t reach full capacity of 560,000 tonnes until 2025 at the earliest. Glencore is also set to restart its Katanga mine this year after completing a major overhaul.
Quellaveco, which Anglo has owned for more than 20 years, would cost around USD 5.5bn to develop, according to Wood Mackenzie, a consultancy, and will be capable of producing more than 200,000 tonnes a year of copper concentrate over its life. The money would be spent on developing an open pit and a mill to produce the concentrate.
Mr William Tankard of Wood Mackenzie said that ¡°Quellaveco¡¯s grade profile is favourably loaded to the front end of the mine plan, which will lift copper production in the early years to over 300,000 tonnes annually; over the planned life of mine it will average just over 200,000 tonnes as the processed grade decreases.¡±
Developing a new copper mine would complete Anglo¡¯s turnaround. The company was among the hardest hit during a commodity price rout in 2015 and 2016. It resumed dividend payments last year after a step-change in operational performance and profitability helped it to shatter a debt reduction target.
-2018 China(Guangzhou)Int¡¯l Non-Ferrous Metal£¨Copper£©Exhibition
-Non-Ferrous Metal exhibition, 2018
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